Microsoft to Close In-Game Ad Unit Massive

Microsoft is preparing to close Massive Inc., the in-game advertising unit it purchased for over $200 million in 2006, according to a MediaWeek report.

MediaWeek’s article, published today, suggests Massive’s sales and engineering staff are currently being reassigned to other projects within Microsoft, and that general manager JJ Richards is seeking a new job. Microsoft has reportedly been seeking a buyer for the unit for months, approaching rival in-game ad-vendor Double Fusion, among others.

In response to a request for comment on the situation, a Microsoft spokesperson said the company “does not comment on rumor or speculation.” Massive staff could not be reached by phone on Friday afternoon and did not return calls by the time of publish.

Video game publisher Electronic Arts (EA) announced in March that it was effectively ending its relationship with Massive by taking ad sales for its newly released titles in-house. The firm was still responsible for selling inventory into EA’s legacy titles, but with dwindling audiences for outdated games, that opportunity is likely contracting daily.

In one of its most high profile campaigns, Massive sold dynamic display inventory to the Obama campaign back in 2008, and ads were served into EA’s Xbox-based NBA basketball game.

Explaining its decision to build its own sales forces, EA’s SVP for global media sales, Elizabeth Harz, said the company recognized the opportunity to sell directly to advertisers. The expansion of video game audiences through family oriented consoles such as the Wii, and new platforms like social and mobile gaming, prompted it to build out its own sales force, rather than partner with a third-party, she suggested.

Meanwhile in the in-game network space, it appears Massive’s rivals could be fairing slightly better, with IGA Worldwide completing an investment round in August. However, the fact that further investment was required could instead be an indication of continued immaturity of the market, and a lack of serious investment from advertisers.

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GroupM predicts that global ad spend will top $547 billion next year, up from $524 billion this year. While television will still capture the biggest share of that 12-figure pie (41%), digital's share will grow from 31% to 33%.